Flickr co-founder Caterina Fake on why VCs missed out early on Etsy

Flickr co-founder Caterina Fake took part in a $1 million Series A investment in Etsy.IncFor many angel investors Etsy will always be the one that got away.

In 2006, when the online marketplace was just a year old, Flickr co-founder Caterina Fake took part in a $1 million Series A investment in Etsy. Getting other VCs to back the company, however, was a hard sell, according to Fake, who pitched the business to investors throughout Silicon Valley.

During a conversation with Inc. Editor Kris Frieswick and other leading women entrepreneurs, including ZipCar's Robin Chase and Brooklyn Industries' Lexy Funk, Fake discussed the experience of trying to attract interest in Etsy from VCs.

"None of them invested in it," Fake said. "They didn't get it."

One of the reasons VCs passed on investing, Fake says, has to do with the fact that they were predominantly men who weren't aware of the market potential for hand-crafted and vintage items.

"They said, 'This is a marketplace where a bunch of women are knitting things,'" Fake said. "I said, 'Yeah, but it's huge.'"

For Fake, the lack of women investors in Silicon Valley is a problem than needs fixing, but one that can also present an opportunity.

"There's an advantage in some ways of being a woman investor," Fake says. "I'm seeing a lot of businesses that I think my male colleagues aren't seeing as well."